With this mode, one can set up the lighting for a level. Just place some lights in the map and see how it gets all lighted up.
There are three types of lights the user can create in a map. These are as follows:
(screens here)
Point light: this might be the type you will get to use most in a level. It is a regular point light, like the ones you could set in a 3D modeling program, meaning it will light up all stuff lying inside its radius. Again, there are two ways of creating Point lights.
By just clicking and releasing, which will create a point light with unit radius.
By clicking, holding while dragging, and releasing to set the radius of the point light.
(screens here)
Spot light: again, you might already know this type of light from 3D modellers. It tries to simulate a focused light, and so, it will only light up stuff that lies in the direction it faces, and inside its radius. They are also the only lights that can make objects cast shadows. To create spot lights, just click on the grid and a new spot light will pop up in the position you clicked.
(screens here)
More on Light objects here.